Letter to The Editor: LIPA Tax Debacle

Now that the October 20th deadline has passed to accept the State imposed agreement on the LIPA Northport power station tax certiorari, Supervisor Petrone, Councilman Cuthbertson and Councilwoman Berland have put each and every homeowner/taxpayer in the Town of Huntington in an extremely precarious position. It is in fact the proverbial sword of Damocles hanging over us.

The back story. LIPA, since 2010, has challenged the Town assessment of the 50 year old, oil fired Northport power station, as well as those in Port Jefferson, Glenwood Landing and Island Park, claiming the outdated technology makes these power stations less valuable. In fact, the E.P.A. has cited the Northport power station as one of the dirtiest on the east coast.

A newer gas fired turbine plant in Yaphank, Caithness, is assessed far less, and in fact has placed the Port Jefferson plant into mothball status. The Glenwood Landing plant is actually slated for demolition due to its age.

Rather than upgrading the Northport power station, LIPA has chosen to build a second gas turbine at Yaphank.

Now a short history lesson. 100 years ago, we as a nation went through a sea change of events. The Federal Reserve, our National banking system was formed. The income tax was created. And mass produced automobiles started to roll off assembly lines in Detroit, providing a new market for John D. Rockefellers petroleum product, gasoline. He had been losing market share of his kerosene products for years since the introduction of the electric light bulb. And yes, buggy whip manufactures went out of business too.

Fast forward to 1981, the IBM PC was introduced. Three years later, the Apple Macintosh. This has changed technology in ways too diverse to describe here.

My point? Technology changes everything, as so with power generation.

To think that the Northport power station will continue to bring in over $70 million a year in taxes forever is wishful thinking. Huntington has the plant assessed at over $3 billion dollars. While it is true the Town has not raised the assessment, the tax rate still goes up, mostly through school cost increases and thus the payments by LIPA. It has been a cash cow.

What would the land be worth with nothing on it? Ask the people of Stony Point, New York.

LIPA has been suing the Town for a 90% reduction in assessment since 2010. The State had an agreement worked out since June that would have forgiven the $200+ million back tax refund, and reduced the overall assessment by 50%, to be phased in over a 10 year period starting in 2015. The Town has had months to mull this over, yet asked for a postponement until January, conveniently after the upcoming elections. LIPA refused. In the words of the LIPA attorney, “It is not likely a few additional weeks will make a difference”.

The Town has not offered a counter proposal, and that deal is now off the table, although the letter does leave room to re-open talks.

The Town tax portion of the State reduction plan is miniscule compared to the back taxes that we now will all be liable for if the Town loses in court. Not including all the legal fees we have already paid for thus far.

This must now go back to the courts, and it is possible that the reduction could be far higher than 50%. And, each and every property owner in Huntington, not just those who have benefited from the low tax rate in Northport/East Northport, will be on the hook for this for many years to come, most likely in the form of a bond.

Technology changes. Nothing stays the same. It is not too late for the Town to accept the State’s offer, endorsed by Senators Flanagan, Marcelino, the L.I.A., and the State legislators, or sit down and negotiate.